URBAN LAND ECONOMICS

Sixth Edition

Jack Harvey B.Sc. (Econ.), Dip. Ed. (Oxford)

and

Ernie J owsey B.A. (Econ) M.A. PGCE

-r

Contents

Preface to the Sixth Edition Xli

Acknowledgements XlV

PART I WELFARE AND ECONOMIC EFFICIENCY

1 Economic Efficiency through the Price System 3 1.1 Welfare and economic efficiency 3 1.2 Conditions necessary for Pareto optimality 5 1.3 Achieving the conditions of economic efficiency 9 1.4 Conditions necessary for economic efficiency

through the price system 12

PART 11 REAL PROPERTY

2 Characteristics of the Real Property Market 21 2.1 Is there a real property market? 21 2.2 The efficiency of the real property market 24

3 Functions of the Real Property Market 30 3.1 Dealings in real property interests 30 3.2 Functions of the real property market -31

4 The Pricing of Land and Land Resources 39 4.1 Land as a whole 39 4.2 The commercial rent of land 41 4.3 The pricing of land resources 45 4.4 The dominance of stocks over flows 46

5 Investment in Real Property 53 5.1 Special investment characteristics

of different interests in real property 54 5.2 Investors in real property 59

~

I

viii Contents

5.3 The overall level of yield on investment assets in general 62

5.4 The pattern of yields on different assets with particular reference to property assets 64

5.5 Asset yields over time: an empirical study 69 5.6 The effect on the real property market of the

demand for land resources as an investment 74

PART ID DEVELOPMENT

6 The Development Process 81 6.1 The nature of development 81 6.2 Problems of the developer 83 6.3 Choosing between capital projects 86 6.4 Estimating demand 93 6.5 Optimum construction outlay 98 6.6 The intensity of site use 99 6.7 The amount which can be paid for the site 100 6.8 The choice of development project 103

7 The Timing and Rate of Redevelopment 105 7.1 The timing of redevelopment 105 7.2 The rate of redevelopment 109

8 Finance for Development 114 8.1 General considerations 114 8.2 Short-term finance 116 8.3 Longer-term development finance 118 8.4 Long-term investment finance 120

9 The Impact of Finance on the Commercial Property Market 126

9.1 The property market in the 1950s and 1960s 127 9.2 The collapse of the property market 1973--4 128 9.3 The 1989-91 property collapse 129 9.4 Lessons which need to be taken on board

from the two collapses 134 9.5 Repercussions of the property collapse 135 9.6 The commercial property scene in 2003 142

10 Comprehensive Redevelopment 144 10.1 The nature of comprehensive redevelopment 144 10.2 Comprehensive redevelopment by private

enterprise 145 10.3 Redevelopment by the local authority 147 10.4 Partnership arrangements between local

authorities and private developers 148

p

Contents ix

11 Public-Sector Development: Cost-Benefit Analysis 152 11.1 The functions of cost-benefit analysis (CBA) 152 11.2 The principles of CBA 154 11.3 The problem of distributional effects 160 11.4 Adjusting market prices 161 11.5 Pricing non-market goods 164 11.6 Dealing with spill over effects and intangibles 167 11.7 Choosing the appropriate discount rate 170 11.8 An appreciation of the role of CBA 174 11.9 Cost-benefit studies of the New Covent

Garden Market 177

12 The Economics of Planning Controls 182 12.1 Externalities 182 12.2 The planning procedure 187 12.3 The rationale of planning controls 188 12.4 The pros and cons of planning controls

as a means of government intervention 195 12.5 The impact of planning controls 197

13 The Construction Industry 202 13.1 The nature of the construction industry 202 13.2 The conditions of demand and supply in the

construction industry 204 13.3 Pricing the product - 208 13.4 The structure of the construction industry 211 13.5 Builders' merchants 213 13.6 Labour 215 13.7 Productivity 217 13.8 Mechanisation 218 13.9 Innovation 222 13.10 Mass production 224 13.11 The present situation and prospects 228

PARTlY URBAN LAND USE

14 Land Use and Land Values 233 14.1 Introduction 233 14.2 Transport costs and location 235 14.3 Factors determining urban land use 238 14.4 Government policy 242

15 The Pattern of Urban Land Use 247 15.1 Location equilibrium for firms and households 247 15.2 Application of the Von Thunen model 252 15.3 Theories of urban structure 260

CO! 1 "

x Contents

16 The Growth of Urban Areas 267 16.1 Theories of urban growth 268 16.2 The urban hierarchy and central place theory 273 16.3 Optimum city size 276 16.4 The problem of 'overspill' 279 16.5 Green belts 281 16.6 New towns 283 16.7 Expanded towns 286

17 The Quality of the Urban Environment: Problems of Urban Areas 290

17.1 Urban decay 291 17.2 Pollution 297 17.3 Conservation 303 17.4 Urban traffic 307

18 Housing 318 18.1 The provision of housing through the

market economy 318 18.2 Housing policy 322 18.3 The economics of rent control 325 18.4 Changes in tenure distribution 328 18.5 The 1979 policy watershed 333 18.6 The impact of the change of policy on

tenures 338 18.7 The weaknesses of Conservative housing

strategy 1979-89 346 18.8 Housing and inflation 347 18.9 The housing market 1989-99 348 18.10 The future provision of housing 350

19 Regional Policy 356 19.1 The regional problem 356 19.2 The location of industry in its regional

context 358 19.3 Theories and·modeis of regional growth 362 19.4 Government policy 365 19.5 Urban regeneration 371 19.6 Regional policy in the context of the EU 373

PART V THE GOVERNMENT AND LAND RESOURCES

20 The Impact of Government Macro Policy on Land and Property Resources 379 20.1 Cyclical instability 379 ')() ') Ml"lnpt<lnr ""1"11;('" ~R,)

F

21

22

23

Index

Contents Xl

20.3 Fiscal policy 20.4 Property in a low-inflation economy 20.5 The role of the governinent as regards

growth and income distribution

Economic Theory and Public Finance 21.1 The provision of goods and services by

the public sector 21.2 Public-sector expenditure 21.3 Financing public-sector services 21.4 User-charges 21.5 Taxation

The Incidence of Taxation on Land Resources 22.1 Direct taxation and land resources 22.2 The impact of VAT on real property 22.3 Local taxes based on property 22.4 Present finance of local government 22.5 The future of local fmance

UK Property and the European Union (EU) 23.1 The EU's single market 23.2 SEM and the property industry 23.3 The position of the UK in the global

market for top-grade property 23.4 The impact of the SEM on the UK 23.5 Economic and Monetary Union (EMU):

the single currency 23.6 An outline of the main pros and cons of UK

membership of the EMU 23.7 The EMU and the UK property market

384 386

387

391

392 394 395 396 400

408 409 414 416 424 428

431 431 432

435 436

436

438 441

449

r

Index

Abbey Life 62 Abbey National 346 accessibility 84, 239

general 239 special 239-40

agents 25 agglomeration economies 239-40,

277 aggregate demand 380 agricultural land 45

capitalisation rate and 76 taxation 403 yield on investment 56-7

Agricultural Holdings Act 1948 57 Agricultural Tenancies Act 1995 57 Assisted Areas 369-71 assured tenancies 337 ATIS REAL 74 auction 26 Authorised Property Unit Trust

(APUT) 138 average rate of return 88 axial development theory 261 Aycliffe 283

B&Q 213,301 Bank of England 128,129,383 banks

[mance of development and 116-18, 129-31, 133-4

housing finance and 345 Barclay's Bank 61 Barclay's Property Holdings 61 basic industries, economic base theory

and 268-70, 364

Blue Circle Properties 61 Boots 257 Bournville 283 Bovis 83,210 British Gas 84 British Nuclear Fuels 395 Brixton Estates 433 brownfield developments 350 Bud Developments 84 builders merchants 214-15 building agreement 149 building see construction building societies

housing finance and 332-3, 345-6 investment in real property by 62 origins 332-3

Building Societies Act 1986-345 Bulgaria 445 Burgess, E. W. 260-261 Business Expansion Scheme

(BES) 339-340 business parks 244

Cadbury, George 283 Cambridge 287 Canary Wharf 141-2 capital

capital gains tax 115, 402-3, 410, 434

costs 98 equity capital finance of

development 120-1 imperfections of the capital

market 241 inheritance tax 402-3,409-10

450 Index

capital (Cont'd) mechanisation in construction

industry 218-20 regional inequalities 357 return on 35-36 site use intensity and 99-100 social 365 taxation of 402-3 timing of redevelopment and 105 wealth tax 402-3

capital projects choice between 86-93, 103 risk/uncertainty and 91-3

capitalisation rate 75-6 car parking restrictions 310-11 casual unemployment 216 central place theory 273-6 Centre Point 75, 127-8 charities 115

investment in real property by 61 taxation of 416

Chelsea Barracks 385 Cheltenham & Gloucester 346

. Christaller, W. 274-5 Church Commissioners 61 Citibank 345 city centres 241-2, 254-5

accessibility and 239 comprehensive redevelopment

144-5 estimation of demand for

development 94-7 location equilibria and 247-52 rejuvenation of town centres 245 transport costs and 51 urban decay and 291-4

City of London and EMU 442-3 Civil Aviation Authority 393 classical model of regional

growth 362-5 collective (community) goods and

services 15, 164, 194,392,396 Command economy 16 commercial paper 137 commercial property market

1950s and 1960s 127 1971-2 property boom 127-8 1973-4 collapse 128-9; lessons

from 134-5

1989-91 collapse 132-3 2003 142 aggregate demand and 380-2 low inflation economy and 386-7 planning controls and 196-7

commercial rent 41-3 Commission for New Towns 284 community goods and services 15, 164,

194, 392, 396 Community Land Act 1975 410 comparative cost method of

evaluation 87 competition

imperfect 27, 162-3, 193 perfect 12-15 rate of redevelopment and 112-3 tendering and 208 ,

complementarities 97,239-40,277 comprehensive redevelopment 132-8,

292 compulsory purchase 193 concentration, economics of 239-40,

277 concentric zone theory 260-1 congestion 308-16 Congestion Charge 312 conservation 303-7 Consortium of Local Authorities

Schools Programme (CLASP) 226 construction 202-28 construction industry

builder's merchants 213-15 criticisms 204 defined 213 demand 205-6 mass production and 224-8 efficiency in 203-4 European Single Currency and 443 government policy and 380-1,383-4 innovation 222-4 labour 217-21 mechanisation 218-20 productivity 217-18 structure 211-13 supply 206-8 unemployment 216

consumer taxes 406 consumers surplus 26, 155 contractors 208-10

conurbations 281 convertible mortgages 138 Cornhill Property Share 62 corporation tax 115, 402, 409, 434 cost-benefit analysis (CBA)

adjusting market prices 161-4 and discount rates 170-4 distributional effects 160-1, 168-9 functions of 152-4, New Covent Garden Study 177-9 pricing non-market goods 164-7 principles 154-5 role of 154

. spillover effects and intangibles 167-8

Council Tax 419 councils see local authorities Countryside Agency 393 Covent Garden Market 177-9 Crawley 284 critical path analysis 223 cut-off period 87-8 cyclical fluctuations 379-82

in construction 206 unemployment 216

Dalton, Hugh 72 defer and accrue plan 138 demand

aggregate 380-1 construction industry demand 205-6 development demand 81-2 rate of redevelopment and 110 housing 319-20,328,330-1 investment 74-6, 110 land 39-40,234,241 management of 380-1 occupation 74-6, 110 real property market 33-4, 55

design brief 85 design and construct contracts 210 developers 83-6

developer traders 131-2 ED single market and 432-3 functions of 84-6

development 34,53, 81-148 financing see finance of development importance in DK economy 82 optimum construction outlay 98

Index

planning gain and 51, private see private sector

development problems of developers 83-6 public sector 152-77 site costs 100-3 site use intensity 99-100

development land tax 410-12 dimensional coordination 224 direct development 120 direct taxation 400,409-14 discount rate 170-4 distributional effects

451

cost-benefit analysis 160-1, 168-9 economic efficiency and 4, 16 government policy and 389 planning controls 194-5, 199-200 public expenditure 394 rent control 326-7 Distribution of Industry Act

1945 367

economic base theory 268-71,364 economic growth 387-8,

cycles in see cyclical fluctuations regional problems see regional

inequalities economic importance

construction industry 203 development 82-3 property 380-2

economic rent 39-40, 44 efficiency 5-16

construction industry 203-4 Pareto optimality and 10-12 real property market 24-8

employment, full 16 English Partnerships 372 Enterprise Zones 123, 296 entry, freedom of 27 Environment Agency 187,301,393 environmental problems

planning control and 184, 189, 196

pollution 278, 297-303 equilibrium market price 43-4 equity capital see shares equity interests 54 estimated realisation price (ERP) 140

r I

452 Index

estimation of demand 83,93-7 euro 438 European Central Bank (ECB) 438,

439,441,442,443 European Commission 369 European Union (EU) 366

Common Agricultural Policy 57 \ Economic and Monetary Union

(EMU) 436-46 evaluation methods 87-93

average rate of return 88 CBA see cost-benefit analysis comparative cost 87 cut-off period 87-8 internal rate of return 90-1 net present value 89 pay-back period 88

Everest 215 exchange efficiency 5-7 exchange rates 383, 435, 436-7,

439-40 expanded towns 286-7 expectations

future yields 33 inflation 16, 66

extensive use ofland 102-3 externalities 15, 86, 164, 167-8, 276-82

pollution and 297-303 regional inequalities and 366

factor combination efficiency 5, 7-8, 11

family credit 334 farmland see agricultural land fee construction 210

. fee simple absolute 23 finance of development 114-42

longer-term 118-20 equity capital 120-1 government sources 123-4 major developments 118-20 market imperfections and 115-16 principles 114-15 short-term 116-18

Financial Instrument for Fisheries 374 firms

location equilibrium for 247-9 taxation: corporation tax 115, 402,

409,434

Uniform Business Rate l33,425-6, 434

First Pacific Davies 435 fiscal policy 384-6

see also taxation fisheries 374 floor-space ratio 95 flows

asset market 68 dominance of stocks over flows in

pricing of land and resources 46-51, 318-19

foreign investors, investment in real property by 61

freehold 23, 30, 32-3 freehold ground rents (FGRs) 30, 32-4

yield on investment 58 free riders 15 frictional costs hypothesis 261-2 frictional unemployment 216 Friends of the Earth 300 full employment 16

games theory 93 gearing 121 gilts 74 global property market 435 government 35

borrowing 395 construction industry and 205 expenditure 394-5 externalities and 185-7 grants to local authorities 426-7 housing policies 322-4 inner-city renewal policies 295-7,353 land use and 233, 242 macro policies 379.,...89 monetary policy 382-4 overspill policies 281 planning policies. see planning

controls pollution control and 297-303 regional policies 365-71 sources of finance for

development 123-4 gravity models 275 green belts 190-1, 281-3 'greenfield'developments 350-1 Green Party 300

ground rents see freehold ground rents Gulf crisis 385

Hadrian's Wall 306 Haig, R. M. 261 Halifax Building Society 346 Hammerson 433, 435, 442 Harris, C. D. 264 Hatfielcl 284 Heath, Edward 73, 127, 135 Heathrow Airport 197 Hemel Hempstead 284 highest and best use 103 high rise developments 102, 228 historic buildings 303-7 historical development, urban land use

and 240-1 Homebase 301 households

land use and 233 location equilibrium for 250-2

house prices 349 house renovation grants 296 housing 318-353

aggregate demand and 381 government policies 322-4 inflation and 347-8 location 259 low inflation economy and 386-7 monetary policy and 383-4 owner-occupied sector 59,319,332,

344-6 planning control and 194-7 private rented sector 328-9, 338-40,

351-3 public sector housing 324, 340-2 subsidies 334-6, 352 supply 318-19,326 yield on investment 56

Housing Act 1980 337, 341 Housing Act 1988 337, 352 housing associations 124, 342-4 housing benefit 336, 352 housing costs 14 Housing Corporation 124, 342 Housing Finance Act 1972 327 Housing Grants, Construction and

Regeneration Act 208 Howard. Ebenezer 283

Index 453

Hoyt, H. 262 human life, valuation of 166-7

imperfect competition 27, 162-3, 193 improvement grants 296 income 34

distribution see distributional effects increase in 241 Keynesian model of urban growth

and 271-3 rent as investment income 54-8

Increase of Rent and Mortgage (War Restrictions) Act 1915 324

incubator hypothesis 259. indirect taxation 163, 403-4 industrial development

economic base theory and 268-71,364 regional differences see regional

inequalities Industrial Development Act 1982 367 industrialised building 224-5 industrial premises

location 259 yield on investment 56

inflation 73-4 economic instability and 382 expectations 16, 66 housing and 347-8 property in a low inflation

economy 386-7 tendering and 209

inheritance tax 402-3,409-10 inner cities 294-7 innovation, construction

industry 222-4 input-output analysis 271, 364 Insignia Group 435 insurance brokers 116, 117 insurance companies, investment in real

property by 59-60 intensive use of land 103 interest rate 73, 205

discount rate 170-4 European Single Currency and

438-40,443 housing and 320 monetary policy and 382-3 rate of redevelopment and 111-12 structure 64-8

454 Index

interests see rights and interests in property

inter-generational equity 154 internal rate of return 90-91 investment 31

assets 24 demand 74-5, 110 low inflation economy and 386 portfolio management 68 real property 59-76

Investment Property Databank 74 IT 55

Jewson Builders Merchants Federation 213

joint companies 119-20, 149 Jones Lang Wootton 435 just-in-time system 436

Keynesian models regional inequalities 364-5 urban growth 271-3 knowledge, planning controls

and 190-92 Kosovo crisis 385

La Salle Partners 435 labour

construction industry 206-22 location of industries and 360-1 mobility of 328, 368

land demand 39-40, 234, 241 development sites see sites market in see real property market productivity 40, 43 supply 39-41, 234, 241 taxation 40, 51,408-29 undeveloped 39 use of see land use value of see land value

Land Securities 433 land use

decisions 233 extensive 102-3 factors affecting 238-42 firms location equilibrium 247-9 governmentand 233,242 households 233, 247-53

intensive 103 urban areas 247-65 User Classes Order 1987 130, 243-5 Von Thunen model of 235-7

land value determination of 233-5 green belts and 191, 281-3 planning controls and 191-2, 197-8 Von Thunen model and 235-7

Lawson, Nigel 135 Layfield Committee 428 leasehold 23, 30, 115

changes in structure ofleases 13 6-7 sale and leaseback schemes 119,

138 yield on investment 58

Leasehold Reform Acts (1967, 1993, 2002) 113, 146

Letchworth 283 liquidity 117 listed buildings 307 Lloyds TSB 346 loans 118, 120 local authorities 393

borrowing 395 comprehensive redevelopment

by 147-8 compulsory purchase 193 expenditure by 340-1,394-5 grants to 426-7 land use and 233 local property taxes 416-28 planning controls see planning

controls user charges 427

local development plan 188 local property taxes 416-28

maintenance 205 agreements 150 costs 98

management 85 construction industry: innovation

and 222-3 labour relations and 217 costs of 54 management contracting 210

Mann, P. H. 265 market

"

controls 163 meaning of 21-2 prices see price system property see real property market

Marks & Spencer 257 Marshall, Alfred 10 mass production: construction

industry 224-7 mechanisation: construction

industry 221-2 MEPC 433 merchandising 97 merchant banks 116, 118, 345 merit goods 392, 397 MFI 301 Milton Keynes 241,284,287 minimum standard

regulations 195-6 MIRAS 409 Mishan, E. J. 297 money

monetary policy 382-4 supply of 65-6, 73

monopolies 26, 27 mortgages 30, 320

convertible 138 long-term fmance of

development 121-3, 138 mortgage debenture 123 sources of mortgage flllance 332,345-6 yield on investment 58

multiple-nucleii theory 264-5

National Home Loans Corporation 345

nationalised industries 393 National Parks Commission 393 National Trust 186, 303, 410 Nationwide Anglia 346 natural gas 174 negotiated contracts 209-10 net annual value rating 419-20 net present value 89-91 Network Rail 395 neutral taxes 400-402 Neve, Thomas 283 New Covent Garden Market 177-9 New Deal for Communities 372 New Lanark 283

New Town Development Corporation 283

new towns 144,283 problems of 284-6

Index 455

New Towns Act 1946 283,284 non-market goods: price system

and 164-7 normal unemployment 216 Northampton 284

occupiers 31 development by 82 occupation demand 74-5, 110 see also owner-occupiers

Office of the Deputy Prime Minister (ODPM) 188,283,310,350,371, 372

office developments location 258-9 yield on investment 55-6

open tender 209 opportunity cost 11, 63, 161, 189 optimum construction outlay 98 option to tax (OTT) 415-6 out of town retail development 243,

258 over-renting 55 overspill policies 279-81 Owen, Robert 283 owner-occupiers 59, 319-21, 344-6,

351 owners

rewards for 35 taxation 404

package deals 210 Pareto, Vilfredo 4 Pareto optimality 4-12, 152-3, 157-8 parking restrictions 310-11 partnership arrangements,

comprehensive redevelopment 148-50

payback period 88 pension funds, investment in real

property by 60-1, 444 perfect competition 12-13 Peterborough 284 Peterlee 283 piece-work 217

-_. __ ..... _--_._---- ----------

456 Index

Pilkington Glass 301 planning controls 84-5, 182-200

planning gain 412-14 Planning Policy Guidance Notes 84,

187-8 Poll Tax 401 pollution 278, 297-303 portfolio management 68 Port Sunlight 283 positive economics 3 pressure groups 184 price discrimination 398-400 price system 12-16 priority yield 118-19 prisoners' dilemma 192 private arrangements, externalities

and 184-5 Private Finance Initiative (PFI) 148,

150, 385 private investors 59 private rented housing 328-30, 338-40,

351-3 private sector development 82-3,

144-50 private treaty 25 privatisation 179, 385 privity of contract 136 probability distribution 92 producers surplus 155 production possibilities curve 9 productivity

construction industry 217-18 land productivity 40, 41

profit location equilibrium for firms

and 247-52 long-term finance of development

and 118-20 maximising 358 normal 40-1 short-term finance of development

and 116-8 project managers 85 Property Advisors to the Civil Estate

(PACE) 31,385 property bond funds 61-2 property companies, investment in real

property by 61 PrODertv Holding:s Ag:encv 31

property insurance/finance brokers 117, 121

property management see management property market see real property

market property unit trusts 60, 62 public auction 26 public (community) goods and

services 15, 164, 194,392,396 public sector

development 83 cost-benefit analysis 161-79 expenditure 394-5 finance of services 395 forms of organisation 392-4 housing 329-333 provision of goods and services

by 392 Public Sector Net Cash

Requirement 150,341, 384, 385, 395,409, 413

public services 277 public transport 313-15

quasi-governmental bodies 393

rack-rent 54 radial development theory 261 radial sector theory 262-3 ranking capital projects 86 rank-size rule 275-6 rate of redevelopment 109-113 rates see local property taxes Real Estate Investment Trusts

(REITS) 139, 386 real property market

characteristics 21 demand 33 economic characteristics 26 efficiency 24 functions 30-1 real property interests 30 real property rights 22 supply 34

recreation, valuation of 164-5 redevelopment

comprehensive see comprehensive redeve10pmen t

rate of 1 09-13

4

r I

urban decay and 291-4 'red light district' 240 Regional Development Agencies 123,

372 regional inequalities 356-75,436 regional selective assistance 123, 369 Reichman, Paul 141 Reilly, W. J. 95-6, 275 Reilly's Law of Retail Gravitation

95-6,275 rent

changes in structure of leases and 136-7

commercial see commercial rent control of 325-8 economic rent 39-40, 44 ground see ground rents as investment income 54 public sector housing 340 rack rent 54 rent charge 123 transport costs and 235-8

Rent Act 1957 327 Rent Act 1974 329 Rent Act 1977 337 restrictive covenants 23 retail development

estimation of demand 93-8 location 256-7 out-of town 243, 258 Reilly's Law of Retail

Gravitation 95-6, 275 yield on investment 55

reverse yield gap 55, 73 rewards for owners 35 ribbon development 280 Ricardo, David 421 Richard Ellis UK 435 rights and interests in property 22-4,

26 changes in 34 dealings in 31 developers' acquisition of 84 special investment characteristics

of 54-8 rights issues 138 ripening costs 84 rise and fall clauses 209 risk 64

Index

in development 83,91-3 finance of development and

116-18 interest rate and 174 risk premium 92

road building 309 Rodamco 435 Romania 445 Ronan Point 222, 227 Royal Society for the Protection of

Birds 184 rule of choice 93 rural areas 278

rural-urban fringe 256. see also agricultural land

Sainsbury 413 sale and leaseback 115, 119, 138 sale of property 25, 85 satisficing behaviour 359 Savills 435 scale economies 277 science parks 245

457

seasonal fluctuations in demand 205 sector zone theory 265 securitisation 139 security for finance 117 selected-list tender 209 selective taxes 400, 403

allocative effects 404-5 sensitivity analysis 92, 140 serial contracting 210 shadow prices 162, 164 shares

equity capital, finance of development 120-1

rights issues 13 8 shops see retail development Single Regeneration Budget

(SRB) 372 sinking funds 58 site(s)

acquisition 84 costs of 100-2 supervision of 217 timing of redevelopment and 105-9 use intensity 99-100

site-value rating 421-4 Slough Estates 61,433

1 i I

458 Index

slums 255, 294, 322 clearance 144

small construction firms 211-3 small and medium enterprises

(SMEs) 369 social capital 365 social disadvantage 295 social security see welfare system Social Security Act 1988 336 social time preference discount

rate 173-4 Special Areas Act 1934 366 specialisation 276 speculative builders 210':"1 spillovers and externalities 15, 86, 164,

167-8,276-82 pollution and 297-303 regional inequalities and 366

stamp duty 410,445 standardisation 224 Standard Life 435 Stansted 287 stocks 64

builders merchants 213-15 dominance of stocks over flows in

pricing of land and resources 46-51, 318-19

structural unemployment 216 structure plans 188, 196 subcontractors, construction

industry 215-16 subsidiary companies 118 subsidies 24, 163

housing 334-6, 352 pollution control and 302 public transport 314

substitutability of assets 66 suburban areas 255-6 supply

construction industry conditions of supply 206-8

mass production and 226-7: small firms and 212-13

housing 318,326 land 39-41,234,241 money 65-6, 73 rate of redevelopment and 111 real property market 34, 45

syndicates 138

taxation 3-4, 15,34,391-429 European Union and 445

Telford 284 tenants, mix of 97 tendering

construction industry 208-10 by sealed bid 26

Tesco 413, 441 Thames Gateway 287 Thatcher, Margaret 130, 333, 340, 344,

348, 351 Tier 1/2/3 369 time

time preference 171, 173-4 valuation of 165-6

timing of redevelopment 105-13 topography 241 , Town and Country Planning Acts 187,

282,329,412 Town Development Act 1952 286 towns see urban areas trade

economic base theory and 268-71 EU and 436,439,443

trade unions, construction industry 217

tradeable permits, pollution control and 303

traffic problems 308-16 transaction costs 26 transfer costs 27, 34 transition zone 255 transport

builders' merchants and 214 costs 51, 165, 277-8 location and 235-7,359-62 development of 241 public 308 traffic problems 308-16

trusts 115 investment in real property by

59-61 twilight zones 292-7

Ullman, E. L. 264 uncertainty 65

in development 83,91-3 interest rate and 174 planning controls and 192

4

unemployment construction industry 216 regional inequalities and 365

Uniform Business Rate 133, 425-6, 434

unitisation of property 138 unit trusts 60, 62, 138 urban areas 44

expanded towns 287 green belts 190-1,281-3 growth 267-288 inner cities see twilight zones land use 238-42 new towns 144,283 overspill policies 279-81 problems 290-316 regional policies and 371-3 suburban areas 255-6,281 see also city centres

Urban Development Grant 296 Urban Regeneration Grant 296 user charges 396-400 User Classes Order 1987 130,

243-5 Uthwatt Committee 198 utility, location equilibrium for

households and 250-1

Valuation Office 385 value see evaluation methods; land

value

Index 459

value added tax (VAT) 414-16,433-4, 445

valuers 25 Von Thunen model ofland use and

value 235-7

waiting costs 84 Warrington 284 wealth tax 402 Weatheralls 74 wedge theory 262~3

welfare 152-4 economic efficiency and 3-4

welfare system 444 housing benefit 336, 352

We1wyn Garden City 283,284 willingness to pay (WTP) 154-8 Woodland Trust 184 World Wide Fund for Nature 304

yield assets and 62-4 expectations of future yields 33,

66 internal rate of return 90-1 investment in real property 54-8 priority yield 118-19 reverse yield gap 55, 73

zoning 193, 196, 198